As the global chip shortage deepens, many companies have been facing debilitating supply constraints. These, in turn, have been weighing on plans for expansion and fulfilling consumer demand. However, some semiconductor firms are cashing in on the vigorous demand. One of these, Texas Instruments Incorporated (TXN), reported its Q2 earnings to the tune of above consensus beats on revenue, EPS, and raised outlook. (See Texas Instruments stock charts on TipRanks)
Elaborating on the situation is Mark Lipacis of Jefferies Group, who wrote that the semiconductor firm has posted another quality earnings report. In fact, this is the sixth report in a row that has beat on revenue and EPS outlook. The analyst noted that Texas Instruments has been experiencing “robust demand,” driven by “industrial, automotive, and personal electronics.”
Lipacis reiterated a Buy rating on the stock, and declared a price target of $220. This target reflects a potential 12-month upside of 16.86%.
The five-star analyst explained that TXN surprised the Wall Street consensus in revenue by 5%, and EPS by 12%. The company has also been repurchasing stock in Q2, $148 million of it in fact. Based on this, Lipacis anticipates a strong Q3 is in the works.
On the downside, Texas Instruments was said by Lipacis to have had some increasingly expanded product release schedules, which he described as stretching lead times. However, he also mentioned that the “majority of products’ lead times are steady,” and that “TXN [is] running at very high utilization.” This signifies that the company is moving at an efficient pace.
On TipRanks, TXN has an analyst rating consensus of Moderate Buy, based on 12 Buy, 6 Hold, and 2 Sell ratings. The average Texas Instruments price target is $211.56, representing a potential 12-month upside of 12.38%. TXN closed trading Monday at a price of $188.26 per share.
Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
